Assumptions for Economic Analysis

Utilitarian theory: primacy of self interest (even in the name of larger collective interests)
Two sets of actors:
1.) Consumers seek to optimize “utility” (satisfaction)
2.) Producers seek to maximize profit
Voluntary choices get made by both parties based on constraints to resources. Efficiency is how best resources get used. Efficiency arises when there is no possible means of redistributing resources that would make one party better off without making someone else worse off.